Discovery Rules for Electronic Records Streamlined

On Dec. 1, the 2006 Federal Rules of Civil Procedure amendments go into effect. These rules, which are published by the U.S. Supreme Court and then approved by Congress, have been revised only nine times since they were established in 1938. This 10th revision alters “changes in discovery” rules that will make it easier for courts and litigating parties to manage electronic records.

This affects organizations managing IT in many ways. First, it means that in the context of legal proceedings, organizations can produce evidence in their native electronic format.

“So, if I store e-mails in a certain file format, I don’t have to worry about exporting them, printing them or changing the file in order to give it to an opposing counsel — I can actually produce it in its format,” said Brian Babineau, analyst for Enterprise Strategy Group (ESG), a research firm that recently published a white paper on the electronic discovery process. “There’s a significant cost reduction in the process of evidence preparation with that change.”

The second way the amendments affect organizations managing IT is by decreeing that legal counsels are expected to have a reasonable understanding of the electronic evidence that exists within their organization and the cost to produce that electronically stored information.

“The biggest problem that organizations have today when it comes to meeting these new requirements is just having an understanding of what they have and where it is to get it back because most counsel, when they go into battle or into that negotiation process, have no idea,” Babineau said. “They don’t know if they have back up dates from three years ago or from 30 years ago, and the ignorance of, ‘Oh, we didn’t know we had that!’ isn’t going to play anymore.”

The third important change the amendments make is the so-called “safe harbor” rule, which says that if organizations have a deletion process as part of their normal course of business, they will not be held accountable for deleting information in keeping with that process. For example, if a company has a policy of retaining its e-mail for five years and deleting e-mail in the sixth year, it cannot be held liable for deleting e-mail at that time.

But Babineau said he highly doubts this rule will influence the behavior of legal counsel.

“I think that attorneys and general counsels are too scared that if they delete something, it’s going to imply negligence or guilt, and they don’t want to have to deal with that,” he said. “But their finance and executive counterparts would be more than happy to utilize that safe harbor to mitigate any risk.”

To illustrate these amendments’ significance, Babineau cited a research statistic from ESG’s recently published white paper, in which the firm found that that 91 percent of organizations with a workforce of more than 20,000 have been through an electronic discovery event involving e-mail in the past 12 months, and 46 percent have been through a general electronic discovery event over the same time period. These findings are based on interviews with 500 corporations conducted earlier this year.